Acquisition So no shares issued
$46.5 million in working capital acquired
15 million in decommissioning funds - half of estimated liability left in the company
ownership of their 500 km pipeline transporting up to 1.4 billion cubic feet per day increased to 21%. Interesting note that ARO for the pipeline is left in the company by project partners. Last year the pipeline dividended out to partners $27 million. Not sure whether that varies much. If not that dividend covers annual maintenance capex for the entire NL subsidiary at present.
increased ownership in multiple oil and gas development projects.
So the market cap of 64.5 million is entirely covered by working capital on hand at closing.
Zero other debt.
the working capital number assumes no changes to the 18.5 million on hand at March 31st. Likely that went up prior to starting the summer drilling program at LW.
cash flow increases 7.4 million for 2023 depending on date of closing.
The deal is immaterial to Exxon so no shareholder vote.
The deal bakes in 15-20% production growth for the NL asset in 2024 due to the mid year closing.
not sure on total cash flow impact. Are the numbers already annualized due to the Jan. 1st back date? Or would the impact be double that in 2024 assuming pricing remains constant?
a bit of a convoluted news release.
regardless - a brilliant transaction from what I can tell.
A 2400 ish barrel per day producers with about 35 million in cash flow and 65 million in cash keeps getting gifted assets like uncle Bob giving his old mustang to a nephew.
NEXT!